KV Pharmaceuticals Emerges From Bankruptcy
ST. LOUIS (AP) — KV Pharmaceuticals Co., maker of a much-debated drug to prevent preterm birth, said Monday it has emerged from chapter 11 bankruptcy with $375 million in credit and shares.
The company said it has secured a new $100 million credit facility and $275 million rights offering and direct purchase of new common shares. The company's recapitalization was led by investors including Capital Ventures International, Greywolf Capital, Kingdon Capital and Deutsche Bank.
The specialty pharmaceutical company focuses on women's health, marketing products for hot flashes, yeast infection and other conditions. The company has been criticized for the pricing of its leading drug Makena, which is approved to prevent preterm birth in women who've already had one premature infant and now are pregnant again. KV Pharmaceuticals sells the drug for $690 per weekly injection, though it can also be purchased in generic form for $10 to $20 a dose from compounding pharmacies that mix customized medications.
Last year KV Pharmaceuticals agreed to pay $17 million to resolve allegations that a subsidiary collected payments from Medicaid for two unapproved drugs. The Department of Justice alleged that the company failed to notify Medicaid officials that the drugs were not eligible for government payments.
"As KV emerges from chapter 11 today, we are a stronger, better capitalized, and more competitive company with a solid financial foundation for future growth," said Greg Divis, CEO of KV, in a statement.
The St. Louis company filed for Chapter 11 bankruptcy protection in August 2012.